Stock market😰

[Michael Weber]

Thanks Dan for the Vanguard advisory information.

[Greg Funk]

This is not to suggest that real estate is not a good investment because in many cases it is. Improved real estate has a benefit of depreciation which will allow for tax deferral too. But in my experience returns are not nearly as high as people think for the reasons above and it is important to account for all the costs before concluding what your return is. This is not an opinion, it's a basic accounting and finance principle.

One factor that can make real estate attractive is the degree of leverage available is much higher. It's often possible to buy property with a 5-25% down payment. Stocks are typically limited to 50% margin.

[Andrew More]

Anybody else like to brag that they're invested in "non-traditional assets" at parties? When I get a blank look I just tell them I'm hedging inflation by buying wood working equipment, some of which has already doubled in price.

[Edwin Santos]

Anybody else like to brag that they're invested in "non-traditional assets" at parties? When I get a blank look I just tell them I'm hedging inflation by buying wood working equipment, some of which has already doubled in price.

Not enough woodworkers at these parties you're attending.

[Edwin Santos]

One factor that can make real estate attractive is the degree of leverage available is much higher. It's often possible to buy property with a 5-25% down payment. Stocks are typically limited to 50% margin.

That's a good point. Especially in an environment of low interest rates like we've had for a long time now.

[dennis thompson]

Well I’m not feeling too bad about my stock losses after seeing that Berkshire Hathaway lost $53 billion in the second quarter, although they can clearly afford it. And as Buffett says, don’t look at quarterly investment losses or gains, easy for him to say

[roger wiegand]

As Mr. Buffet would be the first to tell you, you haven't lost (or gained) anything until you actually sell the asset.

[Thomas McCurnin]

So I had my semi-annual meeting with stock advisors yesterday. The good news, bonds are up, way up. So depending on the grade of bonds purchased, this is a 3-5% return based on the investor owning the actual bond, holding the bond coupon to full maturity (as opposed to investing in a bond mutual fund). The better news is that interest rates will likely go down in a year, so that 3% bond could be re-sold to investors shopping for 3% bonds in a 2% market.

The bad news is that the S&P still sucks, but year to date is about 10% for a pure S&P Index Fund, to 7% to one of the S&P Clones that usually tweek the S&P to get a few extra points return.

The good news is that there were several Specially Managed Funds (SMAs) which shop for value stock that are doing quite well on a three year horizon and year to date. We looked at a couple that had a 3 year return of 12% and a year to date of 7%

Consequently, we moved some stuff out of the S&P and into bonds and the aforementioned SMAs.

[Edwin Santos]

The bad news is that the S&P still sucks, but year to date is about 10% for a pure S&P Index Fund, to 7% to one of the S&P Clones that usually tweek the S&P to get a few extra points return.

Did you mean negative 10%? In real time, the S&P 500 is at -11.61% YTD as I write this.

[Bill Dufour]

Best investment I ever made was buying about 80 dollars worth of forever stamps about one week before they went up. Almost a 10% profit in a few days with zero risk. Olives went from 87 cents to 1.50. We saw some at a different grocery outlet in the mountains so we bought a case of 24? for 87 cents. We use them in salads. pizza, tacos etc so they will not go bad.
Bill D

[Dwayne Watt]

Vanguard PSA costs and level of advisor service are dependent on the amount of money that you place within their management control. Modest amounts (>$50k) are managed by committee (no exclusive advisor), more substantial amounts (>$500k) get you a personal advisor, and large amounts (>$5M) get a wealth management team. The advisor at each level is responsible for maintaining the agreed upon portfolio risk balance (stocks/bonds) and select appropriate funds using the "invest in most everything" approach. They do not use target funds but obviously have all Vanguard funds from which to choose. Vanguard funds are historically very low management fee funds, so that works in your favor as well.
I have no affiliation with Vanguard beyond having personal funds under PSA management. It seems like the right thing for my wife's and mine life situation. YMMV

[Thomas McCurnin]

Yeah, I meant -10% and yes, Vanguard is an excellent trustworthy company. Do be careful with their mutual funds, as the market can go up and the account value will go down for some inexplicable reason. Their bond mutual funds account is terrible, as the investor does not own the fractional bonds, and has no say so whether to hold the bonds to maturity or sell.

The S&P is at a three month high today! Inflation is down, gas prices way down, and things are looking better for 2023.

[dennis thompson]

Yeah, I meant -10% and yes, Vanguard is an excellent trustworthy company. Do be careful with their mutual funds, as the market can go up and the account value will go down for some inexplicable reason. Their bond mutual funds account is terrible, as the investor does not own the fractional bonds, and has no say so whether to hold the bonds to maturity or sell.

The S&P is at a three month high today! Inflation is down, gas prices way down, and things are looking better for 2023.

Tom
I wish I could feel as optimistic as you but looking a little longer term:
CPI is up 8.5% on an annual basis
PPI is up 9.8% on an annual basis
Gasoline is up about 44% vs a year ago
S&P 500 is down about 12% on a year to date basis
I'm fairly sure the Fed is planning to continue to increase interest rates
Congress's latest spending binge is not making me feel good either

[Dan Friedrichs]

The good news is that there were several Specially Managed Funds (SMAs) which shop for value stock that are doing quite well on a three year horizon and year to date. We looked at a couple that had a 3 year return of 12% and a year to date of 7%

Consequently, we moved some stuff out of the S&P and into bonds and the aforementioned SMAs.

What do these charge? Front loads, back loads, AUM fees?

[Thomas McCurnin]

All true Dennis, but ...

Inflation is down in the last month. S&P is up, way up, at a 3 month high as of yesterday. Gas prices are way down in the last 90 days. My analyst says interest rates will go down by late Fall.

So the trend is better news.